Demand outstrips supply to residences in Sofia

The supply of residences in the medium and high segment decreases, and demand grows, this leads to higher prices.

The tendency to reduce the number of projects starting construction since the beginning of the pandemic continues. Supply may be further reduced, as rising construction material prices may postpone some of the planned construction projects in 2021 to next year.

At the same time, there is an increase of 8% in the completed new projects, with which the total supply in the segment reaches a little over twelve thousand apartments, terraced or detached houses. They are concentrated mainly in the southern districts and the districts of Vitosha collar.

The expectations are because of the active demand and the slower pace of new construction, the demand to outpace the supply in the second half of the year, and this will mean that the prices will continue to grow.

In the first half of the year sales prices have already increased by 8%, as the average price of a two-bedroom apartment in the medium-high and high segment of the market is currently between EUR: 156,000.00 and EUR: 194,000.00. In the apartments with three bedrooms the prices vary between EUR: 226,000.00 and EUR: 270,000.00. A house of ordinary type is offered at prices between EUR:270,000.00 and EUR: 450,000.00, and a detached house - from EUR: 486,000.00 upwards.

At the same time, the average rental prices remain stable and for two-bedroom apartments range from EUR:950.00 to EUR: 1,200.00, and for three-bedroom apartments - between EUR: 1,300.00 and EUR: 1,600.00. Average rental prices for a house start from EUR: 2,000.00.

As a result of active demand and a temporary reduction in supply, the difference between the offer and purchase price has almost narrowed and is less than 1% in the first half of the year.

The best-selling types of properties are three-bedroom houses, ground-floor apartments with courtyards and villas near Sofia. New construction continues to be preferred by buyers. Transactions are also concluded at an early stage of construction, as with the progress of construction the possibilities for choice become more limited.

In new construction projects, the elements of “sustainable” construction will enter more and more widely, most often applies the use of renewable energy sources, which will contribute to reducing costs.